Handbook of Logistics Execution Management.pdf

THE HANDBOOK OF

LOGISTICS

DISTRIBUTION

MANAGEMENT

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Publisher’s note

Every possible e ort has been made to ensure that the information contained in this book is accurate at

the time of going to press, and the publishers and authors cannot accept responsibility for any errors or

omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or

refraining from action, as a result of the material in this publication can be accepted by the editor, the

publisher or any of the authors.

First published in Great Britain in 1989 by Kogan Page Limited

Second edition 2000

ird edition 2006

Fourth edition 2010

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as per-

mitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced,

stored or transmitted, in any form or by any means, with the prior permission in writing of the publish-

ers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the

CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the

undermentioned addresses:

120 Pentonville Road

525 South 4th Street, #241

4737/23 Ansari Road

London N1 9JN

Philadelphia PA 19147

Daryaganj

United Kingdom

USA

New Delhi 110002

www.koganpage.com

India

e right of Alan Rushton, Phil Croucher and Peter Baker to be identi ed as the authors of this work

has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

ISBN

978 0 7494 5714 3

E-ISBN

978 0 7494 5935 2

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Typeset by Saxon Graphics Ltd, Derby

Printed and bound in India by Replika Press Pvt Ltd

iii

Contents

List of gures

viii

List of tables

Preface

xvi

Abbreviations

xxi

Part 1

Concepts of logistics and distribution

Introduction to logistics and distribution

Introduction 3; Scope and de nition 4; Historical perspective 7;

Importance of logistics and distribution 9; Logistics and supply chain

structure 13; Summary 13

Integrated logistics and the supply chain

Introduction 15; e total logistics concept 15; Planning for distribution

and logistics 18; e nancial impact of logistics 21; Globalization and

integration 23; Integrated systems 24; Competitive advantage through

logistics 25; Logistics and supply chain management 27; Summary 28

Customer service and logistics

Introduction 30; e importance of customer service 30; e components

of customer service 32; Two conceptual models of service quality 35;

Developing a customer service policy 37; Levels of customer service 44;

Measuring customer service 45; e customer service explosion 47;

Summary 48

Channels of distribution

Introduction 50; Physical distribution channel types and structures 51;

Channel selection 55; Outsourcing channels 59; Summary 61

Key issues and challenges for logistics

Introduction 62; e external environment 63; Manufacturing and supply

66; Distribution 69; Retailing 75; e consumer 76; Summary 79

iv Contents

Part 2

Planning for logistics

Planning framework for logistics

Introduction 83; Pressures for change 83; Strategic planning overview 85;

Logistics design strategy 87; Product characteristics 90; e product life

cycle 93; Packaging 94; Unit loads 94; Summary 95

Logistics processes

Introduction 97; e importance of logistics processes 97; Key logistics

processes 99; Approach 102; Tools and techniques 104; Summary 109

Supply chain segmentation

110

Introduction 110; Product segmentation 110; Demand and supply

segmentation 112; Marketing segmentation 114; Combined segmentation

frameworks 115; Implementation 116; Summary 116

Logistics network planning

117

Introduction 117; e role of distribution centres and warehouses 118;

Cost relationships 120; A planned approach or methodology 127; Initial

analysis and option de nition 129; Logistics modelling 134; Matching

logistics strategy to business strategy 138; Site search and considerations

139; Summary 141

Logistics management and organization

142

Introduction 142; Relationships with other corporate functions 142;

Logistics organizational structures 144; Organizational integration 145; e

role of the logistics or distribution manager 149; Payment schemes 151;

e selection of temporary sta and assets 155; Summary 158

Manufacturing and materials management

159

Introduction 159; Just-in-time 161; Manufacturing resource planning

(MRPII) 163; Material requirements planning (MRP) 163; e MRP

system 164; Flexible ful lment (postponement) 167; e e ects on

distribution activities 168; Summary 169

Part 3

Procurement and inventory decisions

Basic inventory planning and management

173

Introduction 173; e need to hold stocks 173; Types of stock-holding/

inventory 175; e implications for other logistics functions 177; Inventory

costs 179; Inventory replenishment systems 180; e economic order

quantity 183; Demand forecasting 187; Summary 190

Inventory and the supply chain

192

Introduction 192; Problems with traditional approaches to inventory

planning 192; Di erent inventory requirements 193; e lead-time gap

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